Rohit, Divij and Kanav are partners sharing profits in the ratio of 3:2:1. They decided to change their profit sharing ratio from 1st April 2021, as 5:3:2. On that date, they have Workmen Compensation Reserve Rs. 60,000 and General Reserve Rs. 45,000. They have decided not to distribute the General Reserve. Choose the correct statement from the following:
(A) Divij's Capital Account is to be credited with Rs. 20,000 only.
(B) Rohit's Capital Account is to be credited by Rs. 30,000 and debited by Rs. 1,500.
(C) Divij's Capital Account is to be credited with Rs. 20,000 and debited with Rs. 1,500.
(D) Kanav's Capital Account is to be credited with Rs. 10,000 and debited with Rs. 1,500.
Answers
Answer:
sharing profits realisation account
Explanation:
20,000+3:2:1 =20,000+6×4×1=20,024
The correct option will be (C).
Given, old profit sharing ratio of Rohit, divij and kanav = 3:2:1
new profit sharing ratio of Rohit, divij and kanav = 5:3:2
workmen compensation reserve amounts to ₹60,000, which will be credited in the capital accounts of partners in their old ratio.
general reserve amounts to ₹45,000, which will be debited in the capital accounts of partners in their sacrificing ratio as their sacrifice for general reserve.
sacrificing ratio = old ratio - new ratio
divij's sacrificing ratio = 2/6 - 3/10 = 1/30
so, divij's share of workmen compensation reserve to be credited to his capital account in old ratio (3:2:1) = 60,000 * 2/6 = ₹ 20,000
divij's share of sacrifice for general reserve to be debited to his capital account in his sacrificing ratio = 45,000 * 1/30 = ₹1,500
so, option (C) is correct - divij's capital account is to be credited with ₹20,000 and debited with ₹1,500.